Skip to content

CMA Foundation · Fundamentals of Financial and Cost Accounting · Cost, Cost Centre, Cost Unit and Cost Drivers

Which of the following is a feature that distinguishes cost accounting from financial accounting?

Cost accounting provides detailed cost information for each product, job or process so that management can plan, control and decide. Statutory reporting to shareholders, focus on external transactions and prescribed publication formats are features of financial accounting, not cost accounting.

  1. AIt is prepared mainly to meet statutory requirements for shareholders
  2. BIt provides detailed cost information per product, job or process for management decisionsCorrect
  3. CIt deals only with transactions that have occurred with outsiders
  4. DIt follows rigid formats prescribed under company law for publication

Explanation

Cost accounting gives detailed cost data for each product, job or process, mainly for internal management use in planning, control and decisions. The other options describe financial accounting: statutory reporting, external transactions and prescribed formats.

Did you get it right without looking?

One question tells you little. A timed set on Cost, Cost Centre, Cost Unit and Cost Drivers shows your real accuracy, how long you take and where you lose marks.

Practise Cost, Cost Centre, Cost Unit and Cost DriversFree diagnostic mock

More Cost, Cost Centre, Cost Unit and Cost Drivers questions